Government hails unemployment fall

The Government has welcomed a fall in unemployment and benefit claimants and a big increase in the number of people in work.

Almost 30 million people were in employment at the end of 2012, the highest since records began in 1971, while jobseeker's allowance claimants fell to a near two-year low.

But the good news was marred by announcements that 464 jobs face the axe at failed music chain HMV after administrators announced the closure of a further 37 stores, and 400 jobs were put at risk at historic carpet maker Axminster.

Meanwhile youth unemployment increased by 11,000, the highest rise for a year, and the number of people with more than one job increased by 41,000 to 1.1 million.

The Office for National Statistics also reported a continued cut in the real value of pay, with average earnings increasing by 1.4% in the year to December, down by 0.1% on the previous month. Regular pay, excluding bonuses, rose by 1.3%, the lowest figure since the end of 2009.

Secretary of State for Work and Pensions Iain Duncan Smith pointed to figures showing a 15,000 fall in the number of people out of work for over a year to 879,000.

He said: "The fall in long-term unemployment is particularly welcome and shows that the training and support we are offering is helping people move off benefits and into work. These figures show another big increase in full-time jobs, half a million more British people in work over the past year and more women in employment than ever before."

Shadow work and pensions secretary Liam Byrne said: "Today's fall in the headline rate of unemployment is welcome but it is now clearer than ever that British workers are paying the price to get a job or keep a job. People have now taken an average £1,200 pay cut since the election because jobs are so hard to come by and today we see there's still more than five people chasing every vacancy."

TUC general secretary Frances O'Grady said: "The Chancellor must put tackling our youth jobs crisis at the top of his Budget priority list. He can start by introducing a guarantee of paid work for any young person out of work for six months or longer." Neil Carberry, the CBI's director for employment and skills, said: "It's pleasing to see businesses are continuing to create jobs, though the weakness of pay growth shows we are not out of the woods yet."

The so-called claimant count fell for the third month in a row in January, down by 12,500 to 1.54 million, the lowest since June 2011. Unemployment, including those not eligible for benefit, fell by 14,000 in the final quarter of last year to 2.5 million - 156,000 lower than a year ago. The number of people classed as economically inactive, including long-term sick, people looking after a family or those who have given up looking for work, fell below nine million, the lowest figure since the autumn of 2006. Youth unemployment, counting 16 to 24-year-olds, rose by 11,000 to 974,000, the biggest increase since the start of last year.